I'm tempted to think (hope? dream?) that the markets and trade will rebound if all this chaos makes American politics swing back towards an interest in global stability, but I think anyone partnering with the US would do so VERY carefully and right now the entire world is plotting how to remove US dependencies.
Doesn't work. We opened trade to China in the '70s. They took advantage of us, stealing IP, manipulating currency, paying their people terrible wages, crapping all over the environment. We let their companies freely in the US, they very severely restricted US business ventures in China.
Detroit, a former shining city in the industrial heartland, is now a bandit infested ruin.
In the US, a person used to be able to graduate high school and get a job that could support owning a house with a yard, a non-working spouse, a car, and multiple children.
For me, coming from the Rust Belt, it's incredibly, painfully obvious that globalization's basically destroyed the US economy. I'm constantly amazed to meet well-meaning, intelligent people who don't seem to understand this fact.
https://en.m.wikipedia.org/wiki/Disposable_household_and_per...
Even industrial output the US is second highest, and it's closer to first place than second.
https://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_sec...
And supporting a whole family on a single income well was a very narrow window of time, and it required the US to have no real economic competitors. Where US workers had no competition on the world stage, but their output was sold on the world stage. So even if the US go isolationist that's still never coming back.
A lot of the change there is not down to China but limiting the ability to build a cheap house through nimbyism and regulation and then competition from other dual income / high earners bidding everything up. You could fix it by allocating everyone a bit of land and letting them build whatever on it even if it was just a shack. It's not really trade that's the main problem.
That was never sustainable in the long run and no one can bring that back.
Statistically the US manufactures more than it ever has on a $ amount, and is the #2 manufacturer in the world. Until recently, the US economy was the envy of the world. The trade situation the US setup did and does work, and along with other policies, led to enormous prosperity that was just unevenly distributed.
Where the US failed, and mostly around GOP and now Trump policies, is not spreading the growing prosperity to more of its citizens. Given this enormous prosperity where is universal healthcare, free/low cost college, UBI, etc...?
Unfortunately, the people who really need these policies have mostly voted against them for decades. Their anger is legitimate, but it's misplaced. Being angry at "globalization" or "illegals" or pick a group is a misdirection fed by years of AM radio and Fox News. Now we are seeing the cycle continue, but this time the US economy may really be destroyed.
> stealing IP
Edward Snowden's leaks reveal that the US engages in wide-scale economic espionage. Additionally, the US also uses extra-territorial means of coercion to acquire cutting-edge technology -- see e.g. the Alstom case.
> manipulating currency
For many decades the US has been able to print money like a madman while the rest of the world absorbs the costs by virtue of the USD being the primary reserve currency globally. The US is also not above strong-arming its allies into appreciating their own currencies to boost American exports -- see the Plaza Accord, which partly contributed to Japan's subsequent Lost Decades.
> paying their people terrible wages
China has lifted hundreds of millions of people out of abject poverty in the last 20 years. In the US wages have remained stagnant for the working class over the same period, if not longer. Frustration among the working class -- which is entirely justified and understandable, by the way -- is probably one of the reasons why Trump was re-elected.
> crapping all over the environment
Chinese cities today are mostly clean and quiet, increasingly powered by renewable energy with more and more electric vehicles driven on the roads. The Chinese are also undertaking massive greening projects, such as the Great Green Wall: https://en.wikipedia.org/wiki/Great_Green_Wall_(China) On a per-capita basis the Chinese emit far less carbon dioxide than Americans do.
The US, especially when compared to almost any other developed country, is in no moral position to be sanctimonious about environmental issues.
Don't blame other countries -- China or not -- for America's own catastrophic, chronic failure in leadership and subpar policymaking, especially when America has enjoyed so many entrenched advantages for so many decades (and still does).
I've noticed this also, having spent a lot of time in both places. Some would say this is part of the American national character, and it's the darker side of hard-nosed individualistic cowboys, etc. The famous opening speech of Patton comes to mind here:
> When you were kids, you all admired the champion marble shooter, the fastest runner, the big league ball players, the toughest boxers. Americans love a winner and will not tolerate a loser. Americans play to win all the time. Now, I wouldn't give a hoot in hell for a man who lost and laughed.
There's at least some truth to this and the mean-spirited arrogance/strength in the rest of the speech being in line with national character, I think it has to be admitted. This seems like the guy was certainly never cut out to be a diplomat or act with moderation, and maybe most Americans aren't. That said though.. maybe a deeper issue is that suffering (economic or otherwise) changes people. Makes them merely hypocrtical in the best case, aggravated and mean on average, or in the worst case positively cruel. A lot of America has not been ok for a long time now.
China does not WANT to do this. They have tons of protectionism. They give tons of preference to their own firms and protect their domestic market from foreign companies. This enables their firms to grow strong. This is a strategy which has been practiced by many many developing nations. They can't live without it and don't want to.
Why does gmerc think that China is going to rewrite its entire economic policy in order to take "market share?" We usually use that term to mean, you are selling stuff and want to sell to more customers because you make more money. In this context however we are talking about BUYING more stuff - why would it be sane for China to dominate the act of buying everything it can on the planet? (At the inevitable erosion of its manufacturing base - just like what happened to the USA when it opened up its markets.)
I mean you can think whatever you want about Trump and his actions, but it just makes zero sense to think that China will step in and fill the old role of the US here, when doing so is a polar opposite from their current trade strategy and would probably collapse their economy. And that gets to the real elephant in the room, which is that no one wants to do America's "old job" anymore. No one else wants to be the ubiquitous buyer of everything with big trade deficits all over the place, the vast majority of countries on earth defend their domestic markets and preference their local firms more than pre-Trump America did - exactly what are these new alliances that are going to arise, when everyone wants to sell to other countries, and no one wants to buy?
I happen to live in a country whose #1 export market was the USA and is being slapped with some of the largest tariffs. Time will tell of course but at the moment they pretty much just seem to be fucked and all they are saying is they are ready to come to the table and negotiate with the US as soon as possible. There just doesn't seem to be a ton of demand for their exports elsewhere - it's not like every country on earth isn't out there pimping its exports to anyone who will listen, pretty much all the time. If China or the EU had a burning need for a couple hundred billion dollars more of shellfish or textiles or what have you, they'd already be buying it.
I understand that argument I've never seen it spelled out by anyone other than me. I only brought it up as a last effort to explain the possible thinking behind these actions. It still won't make sense because even if you believe that you are the top dog and you can effortlessly bully others then you'd have to realize that you won't be the top dog in every situation all the time everywhere at the same time. There will be many instances where others who previously leaned your way for free will now look to get paid for leaning your way.
While they may "talk the talk", Europe doesn't "Walk the walk"! Europe has strong tariffs on imports. The USA is now simply equalizing the situation. Here's an example:
Automobile Tariffs by Country 2025: put your cursor on a country to see its automobile tariff. European tariffs on autos are roughly four times those of the USA. While you're there you can look up the "sales tax" too!
https://worldpopulationreview.com/country-rankings/automobil...
European companies have had tariffs on USA products for decades. Those tariffs protect and maintain industries within a country. The USA failed to maintain that protection: the USA lost jobs and harmed industry which guts an economy. Meanwhile, for example, Germany protected it's auto industry with tariffs on cars from abroad.
My feeling is that "What's good for the goose is good for the gander."
There's no doubt that the "Law of Comparative Advantage"(LCA) in economics is a valid argument for trade. However, the LCA is almost always argued in the absence of externalities: costs generated by use of the LCA are usually not taken into account when examining a full economy: job losses, industry shrinkage and failure, etc.
The US has benefited massively from soaking up the best brains globally. That's not going to keep happening; I have plenty of colleagues already who are refusing to travel to the US. We may well even swing into brain drain as Trump et al move closer to executing their cultural revolution.
Meanwhile, all those other countries will start trading more with each other. The US stands to be left out. Won't happen overnight, but Trump is pissing away the advantages. When the dollar isn't the global currency anymore things will really start to hurt.
I highly doubt people were ok with that because the US had low tariffs on their countries exports to the US.
If you (the US) massively subsidize the world order through your financial markets, military defense, and foreign aid, it’s only fair that you get to take advantage of your position.
Historically, the US has done this at the expense of its working class. Now there is a populist feeling that we are owed a long due “payback” for our generosity.
The Bernie/AOC left believe the payback is owed by our elites, who enriched themselves by austerity and hollowing out our industrial base.
The Trump/MAGA right believe the payback is owed by other countries — freeloaders that have benefited from our technology, military defense, and foreign aid while simultaneously being net exporters to the US.
To the latter crowd, the kind of “bullying” behavior you describe is actually the equivalent of a gentle giant who never stood up for himself finally deciding that he won’t take any more shit.
Edit: To any downvoters, please comment with where you think I’m wrong. I’m not defending any policy, just providing what I believe is an accurate representation of the populist American mindset described in the parent comment.
Assuming this generous interpretation is accurate, then it's a problem of ignorance of the people holding this view. Characterizing other countries as 'freeloaders' is exactly that - ignorance.
People don't want to admit wealth distribution is the problem because that would make them "communists". It's an emotional response. I'm scared how far they take it.
I'm not trying to jump on you for having captured it, but the problem is that this is wholly nonsensical - the repayment for benefiting from our technology and military defense IS the net exporting to the US (via holding our currency). That "logic" is still based on having one foot in the paradigm of the financial engineering puppetmasters where getting real physical goods is somehow a liability rather than a benefit!
For sure, this enviable position has had a corrosive effect on our economy. But the inability to deal with that has been wholly down to self-inflicted policy wounds of previous decades - chiefly led by the Republican party marketing a game of fake "fiscal responsibility" whereby the government is prevented from taking deliberate action to mitigate the displacement of industry and workers, while the increased (but now centralized) wealth from offshoring (and other technological/economic gains) was merely handed over to the banksters in the form of low-interest loans that went into driving up the asset bubble.
Look at the number of multibillionaires the US has acquired over the past 40 years. The trillion dollar megacorps. The many millionaires in Congress. Those are the people who owe payback to the American public. But those are also the people who control the American public, control their news, and feed them misinformation.
I mean, in the specific realm of trade wars, that’s probably more correct, because the game theory of the thing tends to make retaliating against the aggressor nigh-inevitable, particularly in a “country v world” situation.
The pump'n'dump scheme against Ukraine will forever change how small countries see the US support for democracy, even if it changes back to the previous status-quo.
All the US had to do was supply it's old weapons to Ukraine whilst replenishing it's stock (creating jobs in America) and things would have been fine. Now we're all in a world were Europeans are openly talking about developing nuclear weapons. Taiwan is totally on it's own, and Greenland is worried about being annexed.
There's real trouble coming.
Well, no, it's not fine, partly because we can't replenish our stocks fast enough. Ukraine is consuming nearly the entire planet's production capacity of Patriot missiles, eating enough of our ATACMS stockpile that it makes Combatant Commanders nervous, and more. To say nothing of the argument "supply Ukraine for as long as it takes, even if that means indefinitely" never made any sense; actions taken without a clear, achievable end goal in mind are just a waste of resources.
https://economictimes.indiatimes.com/news/international/us/d...
https://www.bruegel.org/analysis/us-defence-industrial-base-...
“The Ukraine war is great because it creates US jobs through weapons manufacturing. Yeah, we might get our hair a bit mussed with the hundreds of thousands of deaths, but net-net it’s a win!”
Realistically, it is for the best if countries are resilient to US failure. It will make Americans generationally poorer, but the world will be better off for it.
The world will become more resilient, but this could easily be a lose-lose for USA and other democratic nations.
Is that why Ukraine agreed to the Budapest Memorandum?
If Trump and the rest of his podcasting/influencer buffoon class, can rise to power in the US riding on what is valued by Attention Economics, then the same can repeat in every country in the world.
The root cause is not changing cause the Algos have created a game that favor those who love Attention and will do whatever it takes to get it and keep it.
> No new tariffs were announced for Canada. Canada and Mexico’s exemption for USMCA/CUSMA qualifying goods was maintained. However, 25% tariffs on non-USMCA compliant Canadian goods, Canadian steel and aluminum, Canadian autos and parts, and the 10% tariff on Canadian energy exports remain in place.. there are signs that negotiators on both sides are trying to steer Canada-US trade to a more productive process of an expedited renegotiation of the Canada-US-Mexico Trade Agreement (CUSMA).
More context on US trade policy: https://news.ycombinator.com/item?id=43589350
If you run that formula for Canada and Mexico, the number would be LOWER than the tariffs already imposed.
So they had to leave Canada and Mexico off to keep things looking consistent.
You can confirm here from USTR stats: https://ustr.gov/countries-regions/americas/canada#:~:text=C...
> both leaders claim their approaches have helped them this week avoid what Trump calls “liberation day” tariffs.. Mexican officials on Thursday said the strategy had borne fruit and they would focus on getting an even better deal. Economy minister Marcelo Ebrard said: “It's a great achievement, I’d say, from the point of view of where we started not long ago that there would be no exemptions.” .. Mexico remains upbeat, with [President] Sheinbaum on Thursday trying to lure companies to invest in USMCA-compliant production in the country. “We think that with the dialogue we’ve established there are the conditions to have a better deal,” she said.
EU / China trade pacts, China / California, Mexico / EU. People have to patch around the mistaken over-reliance on sanity from the US. It’ll happen, not sure if it’ll take a few weeks or a few years though.